1. Introduction

Thank you for this opportunity to submit to this consultation on ‘Policy Options for the Regulation of Electronic Cigarettes’. The sale and supply of nicotine e-cigarettes and liquids is a welcome change to the current regulation. While a growing number of people have taken up vaping in New Zealand, this does not mean the status quo is necessarily working. Vapers who import nicotine e-liquids from overseas risk bringing in unsafe or unknown products, without the same consumer protection under New Zealand legislation. Paradoxically, domestic retailers face more stringent regulations than international retailers, despite the fact it is more easy to hold domestic retailers accountable.

I am a Policy Analyst with The New Zealand Initiative, and author of The Initiative’s report on public health and lifestyle regulations The Health of the State (April, 2016). The New Zealand Initiative is a public policy think-tank based in Wellington, supported by New Zealand’s leading businesses. The shared vision of The Initiative’s staff and members is to build a free and prosperous New Zealand. I can be contacted at jenesa.jeram@nzinitiative.org.nz

My interest in this consultation stems primarily from my research for The Health of the State (available on The New Zealand Initiative’s website). The report considers public health from two angles. The first is whether the policy’s infringements on personal choice and liberty is justified. The report also looked at the evidence that supports public health policies, such as those around e-cigarettes. The Health of the State considers the quality of these studies and points out some of the methodological flaws recognised in those research areas. My research found flaws in many of the studies that purported to show associated risks or harms from e-cigarettes. Given no substantial risks had been established at the time of publication, the report recommended a harm-reduction approach to e-cigarettes. The policy framework envisaged would involve minimal regulation, given the existing coverage of the Consumer Guarantees Act (1993) and the Fair Trading Act (1986), and the risk of stifling market competition and innovation of the product.

Since releasing The Health of the State report in April, I have remained engaged with overseas developments regarding new research and legislation. Of particular interest are the likely consequences of the European Union Tobacco Products Directive (EUTPD[1]) and the Food and Drug Administration’s (FDA) regulatory framework. Despite new studies being released since publication, no research to date has convinced me to rethink my conclusions on the e-cigarette’s role in harm reduction.[2]

Based on the principles of harm reduction and avoiding unnecessary regulation[3], the challenge will be balancing the following priorities:

Ensuring reasonable health and safety precautions.

A range of products are available to suit individual needs and preferences.

Regulations should not favour specific businesses by being overly prescriptive.

The products are accessible for vapers (ready access to the product will increase its effectiveness as a cessation tool)[4].

As a new technology, legislation should not constrain improvements to the model, or constrain the development of similar products.

Whatever regulations are eventually applied to e-cigarettes will no doubt stem from whatever the primary aim of e-cigarette policy is. These are the principles The New Zealand Initiative would recommend:

Regulations should be proportionate with proven individual harm, or increased disease risk.

Any harm should be considered on a net basis, which means considering the benefits of the product, as well as the costs.

Given the long term effectiveness as a cessation tool is still unknown, e-cigarettes should be treated as a consumer product, not a health product. As a consumer product, where possible, further regulations should not be needed, given the already wide-reaching requirements of the Consumer Guarantees Act and Fair Trading Act.

[1] Many of the recommendations suggested in the Ministry of Health’s discussion document are similar to Article 20 of the EUTPD. The European Union’s regulation of e-cigarettes has been criticised as damaging for both vapers (current and potential) and manufacturers. On the consumer side, the regulations are likely to disincentivise vaping as an alternative to smoking. On the producer side, regulations are likely to increase the costs of production, discourage innovation, and can limit market diversity. Christopher Snowdon, Director of Lifestyle Economics at the Institute of Economic Affairs has reviewed the likely implications for each regulation in Article 20. See Christopher Snowdon (2015) ‘E-cigarettes and Article 20 of the Tobacco Products Directive’, Epicenter, http://www.epicenternetwork.eu/wp-content/uploads/2015/09/EPICENTER-Briefing-E-cigarettes-and-Article-20-14th-September-2015.pdf

[2] Though new research has been released since publication of The Health of the State, many of the studies repeat the flaws in methodology or policy conclusions that I identified in my research.

[3] Even with the best intentions, unnecessary regulation, misguided regulation, or poorly designed regulation can sometimes cause more harm than applying no regulations at all. Further, once regulations are put in place, they can become costly and burdensome to lift. For a recent example, consider the 400% increase in the price of EpiPens in the US, due to pharmaceutical giant Mylan enjoying a monopoly protected by FDA regulation. The burden of proof regarding EpiPen safety and effectiveness is so stringent and costly that no other manufacturers have been able to enter the market and compete at the same level.

[4] As an addictive product, ready access is important to satisfy nicotine cravings, and if access is too limited, vapers trying to quit smoking could easily just switch back to smoking.

And just because it’s fun, here’s my favourite footnote (footnote 2):

9.4 There is no evidence that the activity imposes disproportionate costs on the health system. While vaping is not a risk-free activity[1], there has not yet been established any risk of death or disease from vaping that is high enough to warrant an excise tax.[2]

[1] Given New Zealanders voluntarily participate in all manner of risky activities from mountain biking, to driving, to rugby, it would seem odd to impose an additional tax on vaping even if a minor risk had been proven.

[2] There is only one case where an excise on vaping might be justified to recoup costs borne through the health system, and it is an absurd case. If smokers were to quit smoking entirely through the aid of vaping, they are likely to improve their health and life expectancy. While that is a gain for the individual, and for public health, there is evidence that shows that it is the healthy and long-living that wind up costing the health system more in end of life care. This, combined with a reduction in excise revenue collected, could leave the government coffers worse off. In case it is not obvious, it is not our recommendation to thus impose a tax. The point is that the so-called ‘costs to the health system’ justification cannot be made for vaping.

You might be able to tell, we are not favour in favour of applying excise to vape products.